New Tax Credits for Home Solar Installations

There’s a new tax credit that you may find useful if you’re a home-owner who will be trying to get under the tax line :

The law both increases tax credits for commercial solar installations and offers individual homeowners a credit for the first time in 20 years. (An earlier personal-use solar credit was in effect .)

Interested in claiming a credit? Act fast. To hold down the projected cost, Congress authorized the solar credits for only two years — .…

Homeowners… can put in a photovoltaic system (roof panels that take in energy from the sun and turn it into electricity) and/or a solar-powered hot water system (for hot water heaters, radiant floors or radiators), and get a federal tax credit worth 30% of the systems’ cost, up to a credit of $2,000 per system. There are a couple of catches: The heating system can’t be for a pool or hot tub, and the federal credit applies to the net system cost after any state incentives.

The good part is that this new federal break is a credit — not a deduction — meaning it reduces your tax bill directly, dollar for dollar. So, if you install both eligible solar systems in your house, you can knock $4,000 off your federal tax bill. And if you have more credit than you owe in tax, you can carry it over and use it to defray next year’s federal tax bill.

A contributor at The Claire Files writes:

Here is an idea [to] help others avoid taxes.

I love to tip with cash. When I was a waiter I was told I had to report my tips… but only half. (I think my boss wanted to help us students out, he did pay us almost minimum wage and we got tips.) Cash tips are easy to under-report. I asked about that recently and was told that most people pay with credit card/debit card and that the government now uses a percentage method for tips. They look at the charged meals, look at the number of total meals served, and then look at the charged tips to figure out how much cash tips you received.

(100 meals served. 50 payed with card, tipping 15%. the government calculates 15% from 100 meals even if cash tips are only 10%)

You can help out by tipping more when paying with cash or better yet, when you pay with card, put 1% tip on it and put the rest out as cash. I even leave a note for the server saying “this is your money, don’t tell your boss, or the government. share it with the buss boy if that is the policy.” This will help lower the average tip figures, but still give the nice server what they have earned.